Employers should pay foreign worker levy, say civil society groups (Malaysian Insider)

Employers should pay foreign worker levy, say civil society groups

Published: 13 February 2016 3:18 PM

Civil society organisations say employers of migrant workers should pay the migrant worker levy, not the workers themselves. – The Malaysian Insider file pic, February 13, 2016. 

 

Putrajaya should ensure that employers of migrant workers do not force their staff to pay the foreign worker levy, nearly a hundred civil society groups from across the globe said in a joint press statement.

They also urged the government to reconsider the levy hike, which Deputy Prime Minister Datuk Seri Ahmad Zahid Hamidi said last month would bring RM2.5 billion to the country.

"We, the 97 undersigned civil society organisations, trade unions and groups are shocked by the news that the Malaysian government is increasing the migrant worker (foreign worker) levy to more than double the current rate, which since January 2013, had to be paid by the migrant workers themselves.
"Prior to that, it was paid by the employer of migrant workers, whereby the introduction of the levy then was to deter employers employing migrant workers, rather than local Malaysian workers," they said. While news reports have revealed employers will now have to pay the levy again, several groups have lobbied the government to reconsider this, they said.

They also noted that Putrajaya had deferred the new hike to consult employers on the levy before making a final decision after Chinese New Year.

"There is concern that this re-consideration may not just be about the amount of levy payable, but also the question as to who will have to pay the levy – migrant workers or their employer?

"Therefore, we the undersigned call on the Malaysian government in the name of justice, to ensure that it must be the employers of migrant workers that should be paying this migrant worker levy – not the migrant workers," they said.

They urged the government to increase the minimum wage of all workers in the country to RM1,200-RM1,500 and to abolish the contractor system.

"Since many employers do not take in migrant workers directly as their own employees, but take and use them as workers who are supplied by the labour suppliers – legally known as the contractors for labour – it effectively prevents these supplied migrant workers the right to join in-house trade unions."

They said all workers should be recognised as employees and treated equally.

The full list of the signatories can be found here. – February 13, 2016.

 

- See more at: http://www.themalaysianinsider.com/malaysia/article/employers-should-pay-foreign-worker-levy-say-civil-society-groups#sthash.rGMujHdX.dpuf

For full statement, see ...

97 Groups say it is 'Immoral for Malaysia to take from Workers to overcome national economic problems' - Employers should pay the Levy – Not Migrant Workers

 

Electrical Industry Workers' Union(EIWU) makes it 79 :-MINIMUM WAGES FOR ALL WORKERS, INCLUDING MIGRANT WORKERS - No to Wage Deduction to recover Levy Payable By Employers -

Joint Statement- 5/2/2013 (now 79)

MINIMUM WAGES FOR ALL WORKERS, INCLUDING MIGRANT WORKERS

- No to Wage Deduction to recover Levy Payable By Employers -

We, the undersigned 79 civil society organizations, trade unions and groups are shocked with the recent decision of the Malaysian cabinet on 30/1/2013 to allow employers of migrant workers to recover levy that they paid the government to employ foreign workers from migrant workers through wage deductions. 

According to the law, workers in Malaysia were to receive minimum wages of RM900[USD291](for Peninsular Malaysia) and RM800[USD259] (for Sabah and Sarawak) as of 1/1/2013. Khalid Atan, the President of the Malaysian Trade Union Congress(MTUC) said, “…if workers were asked to pay the levy, the minimum wages policy would not benefit them at all, as whatever little increase in salary they enjoyed, would be wiped out with the levy payment…” [Star, 10/1/2013, MTUC: Don't give in to employers' demand on foreign workers levy]

Some employers have also been trying to avoid this obligation to pay minimum wages, which is basic wages not inclusive overtime, existing allowances and other benefits. Some do it by re-structuring worker remuneration by including all other allowances, incentives and benefits to make up the RM900, which is very wrong. Some employers are making employees to sign documents agreeing to these changes, whereby this is made easier when there are no worker unions. Workers generally have no avenue of complaint, or even choice in the matter especially when many now are employed based on short-term employment contract. A refusal by the worker means a non-renewal or no new employment contracts when their contracts expire.

To avoid paying workers minimum wages, the Malaysian government also allowed employers the right to apply for a delay in paying workers minimum wages, and vide Minimum Wages(Amendment) Order 2012 dated 28/12/2012, the government allowed more than 500 employers to delay paying workers minimum wages. What was blatantly wrong in this process was that the aggrieved workers and/or their unions were not given any right to be heard before the employer’s application to deny them their entitlement to minimum wages was approved.

The Malaysian government, in the past, on the application of certain employers, allowed them to make wage deductions and/or wage advances, contrary to the general provisions in law with the intention to allow employers to recover from migrant workers monies expended by employers to get migrant workers to Malaysia to work for them. This included sometimes not just a means to recover levy paid, but also all other costs incurred by employers to recruit and bring in migrant workers. Approvals were given by the government with no consultation or agreement of the worker or their unions. As of 1/4/2009, the Malaysian government stopped this practice, and made it clear that it is employers that have to pay the levy and they cannot recover the said sum from migrant workers.

Labour Director-General Datuk Ismail Abdul Rahim was reported saying that, “…The rationale behind getting employers to bear the levy was to discourage them from employing foreigners…” [Star, 16/4/2009, Employers can deduct levy from wages, again]. As such, this current move to make migrant workers pay the levy removes the very intention of levy, i.e. to discourage employers from employing foreign workers. 

The reason for the new decision ‘… is to alleviate the hiring cost for employers, said Finance Minister II Datuk Seri Ahmad Husni Hanadzlah...’ [Star, 30/1/2013, Cabinet: Foreign workers to pay levy instead of employers with immediate effect]. If the Malaysian government now wants to reduce the financial burden of employers who hire migrant workers, then rightfully the government should reduce or remove the levy – not shift the burden to workers. 

Migrant workers sacrifice a lot when they elect to come to Malaysia to work. They have to leave behind the spouses, children, family and friends for Malaysian law allows them to only come alone and work in Malaysia, and they also are barred from falling in love and getting married during their employment period  which is usually for at least 5 years. They also end up incurring substantial debt when they come, for they have to pay, amongst others recruitment agents, most times these payments include both legal and ‘illegal’ payments. Whilst in Malaysia, they are bound to just one employer – having no right to change employers. 

When they claim rights, even through existing legal avenues, they generally are terminated and their employment pass/permits are also cancelled depriving them the right to stay (or work) legally in Malaysia until their claims are resolved. The termination of these passes/permits is done by the Malaysian government irrespective of whether there are outstanding claims or pending cases concerning the said worker’s rights. 

This precarious reality of migrant workers makes them vulnerable to exploitation by some employers, knowing that it is most easy to violate worker rights and then get off scot free. Until laws and policies are amended to protect migrant’s worker rights, naturally migrant workers become the preferred choice over local workers as they are certainly a more easily exploited class of workers.

We call on the Malaysian government to immediately rescind the decision made by the Malaysian cabinet on Wednesday(30/1/2013) to allow employers of migrant workers to recover the levy they pay the government by deduction of wages of migrant workers.

We take the position that all workers, including migrant workers, are entitled to receive minimum wages, whereby this is the basic wage and should not include allowances, benefits and other work incentives. Employers should not be permitted to remove pre-April 2012 worker entitlements and benefits, being the date the Minimum Wage Order 2012 came into force, from existing and subsequent employment contracts.

We call on the Malaysian government to end all forms of discrimination against workers, with regard to, amongst others, their nationality, gender, duration of their employment contracts.

Charles Hector

Pranom Somwong

Syed Shahir Syed Mohamud

For and on behalf the 79  groups listed:

ALIRAN

Angkatan Rakyat Muda Parti Rakyat Malaysia (ARM-PRM)

Asian Migrant Centre (AMC), Hong Kong 

Asian Migrants Coordinating Body (AMCB) Hong Kong

Asia Monitor Resource Centre, Hong Kong

Asia Pacific Forum on Women, Law And Development (APWLD)

Asia Pacific Mission For Migrants (APMM ), Hong Kong

Association of Indonesian Migrant Worker in Hong Kong (ATKI-HK)

Bangladeshi Ovibashi Mohila Sramik Association (BOMSA)

Burma Campaign Malaysia

BWI (Building and Wood Worker's International)

CAW (Committee for Asian Women)

Centre for Human Rights and Development-Sri Lanka

Center for Orang  Asli Concerns (COAC), Malaysia

CEREAL - Centro de Reflexión y Acción Laboral – Guadalajara, Mexico

Clean Clothes Campaign( CCC )

Community Action Network (CAN), Malaysia

Community Development Services, Sri Lanka

COVA (Confederation of Voluntary Associations), India

Electronic Industry Employees Union Western Region (EIEUWR), Malaysia

Far East Overseas Nepalese Association (FEONA), Hong Kong

Filipino Migrant Workers Union (FMWU)

GoodElectronics Network

Human Rights Ambassador for Salem-News.com

IMA Research Foundation, Bangladesh

International Domestic Workers Network

Kesatuan Pekerja-Pekerja Polyplastics Asia Pacific Sdn Bhd.

Kesatuan Pekerja-Pekerja MHS Aviation Berhad

Kesatuan Sekerja Industri Elektronik Wilayah Selatan (EIEUSR), Malaysia

LSCW (Legal Support for Children and Women), Cambodia

MADPET (Malaysians Against Death Penalty and Torture)

Malaysia Youth & Students Democratic Movement (DEMA)

MAP Foundation, Thailand

Migrant Domestic Workers Trust, India

Migrant Forum, India

Migrant Health Association in Korea

MIGRANTE International

Mindanao Migrants Center for Empowering Actions, Inc. (MMCEAI)

Mission For Migrant Workers - Hong Kong

MTUC (Malaysian Trade Union Congress)

Myanmar Ethnic Rohingyas Human Rights Organization Malaysia (MERHROM)

National Domestic Workers Movement, India

National Union of Transport Equipment & Allied Industries Workers (NUTEAIW)

Network of Action for Migrants in Malaysia (NAMM)

NLD-LA (National League for Democracy-Liberated Areas), Malaysia

NUBE (National Union of Banking Employees), Malaysia

OKUP (Ovibashi Karmi Unnayan Program) in Bangladesh

Parti Rakyat Malaysia(PRM)

Paper & Paper Products Manufacturing Employees' Union Of Malaysia (PPPMEU)

 Persatuan  Sahabat  Wanita, Selangor

Persatuan  Kesedaran Komuniti Selangor (EMPOWER)

Persatuan Masyarakat Selangor & Wilayah Persekutuan (PERMAS)

PILAR (United Indonesians in Hong Kong against Overcharging) , Hong Kong

Pusat KOMAS (KOMAS)

Saya Anak Bangsa Malaysia {SABM}

SUARAM, Malaysia

Tamilnadu Domestic Workers Union, India

Tamilnadu Domestic Workers Welfare Trust, India

Tenaganita, Malaysia

Transient Workers Count Too (TWC2), Singapore

United for Foreign Domestic Workers' Rights (UFDWR )

WAC, Philippines

WARBE Development Foundation-Bangladesh

Women Workers Lead

WH4C – Workers Hub For Change

Yayasan LINTAS NUSA - Batam – Indonesia

Solidaritas Perempuan (SP) / Women's Solidarity for Human Rights, Indonesia

SEWA (Self Employed Women’s Association), India

Electronic Industry Employees Union Eastern  Region(EIEUER), Malaysia[KSIEWTSM]  

MakeITFair

Nepal Labour Journalists' Association

Migrant  Care, Indonesia

CIMS (Centre for Indian Migrant's Studies)

United Filipinos in Hong Kong (UNIFIL-MIGRANTE-HK)

Kav LaOved – Protecting Workers' Rights

PINAY: Filipino Women's Organization in Quebec

Tenaga National Berhad Junior Officers Union (TNBJOU)

New Endorsements (after 77)

Electrical Industry Workers' Union(EIWU), Malaysia

Malaysian Physicians for Social Responsibility

TNBJOU makes it 77 saying 'No to Wage Deduction to recover Levy Payable By Employers'

Joint Statement- 5/2/2013 (now 77)

MINIMUM WAGES FOR ALL WORKERS, INCLUDING MIGRANT WORKERS

- No to Wage Deduction to recover Levy Payable By Employers -

We, the undersigned 77 civil society organizations, trade unions and groups are shocked with the recent decision of the Malaysian cabinet on 30/1/2013 to allow employers of migrant workers to recover levy that they paid the government to employ foreign workers from migrant workers through wage deductions. 

According to the law, workers in Malaysia were to receive minimum wages of RM900[USD291](for Peninsular Malaysia) and RM800[USD259] (for Sabah and Sarawak) as of 1/1/2013. Khalid Atan, the President of the Malaysian Trade Union Congress(MTUC) said, “…if workers were asked to pay the levy, the minimum wages policy would not benefit them at all, as whatever little increase in salary they enjoyed, would be wiped out with the levy payment…” [Star, 10/1/2013, MTUC: Don't give in to employers' demand on foreign workers levy]

Some employers have also been trying to avoid this obligation to pay minimum wages, which is basic wages not inclusive overtime, existing allowances and other benefits. Some do it by re-structuring worker remuneration by including all other allowances, incentives and benefits to make up the RM900, which is very wrong. Some employers are making employees to sign documents agreeing to these changes, whereby this is made easier when there are no worker unions. Workers generally have no avenue of complaint, or even choice in the matter especially when many now are employed based on short-term employment contract. A refusal by the worker means a non-renewal or no new employment contracts when their contracts expire.

To avoid paying workers minimum wages, the Malaysian government also allowed employers the right to apply for a delay in paying workers minimum wages, and vide Minimum Wages(Amendment) Order 2012 dated 28/12/2012, the government allowed more than 500 employers to delay paying workers minimum wages. What was blatantly wrong in this process was that the aggrieved workers and/or their unions were not given any right to be heard before the employer’s application to deny them their entitlement to minimum wages was approved.

The Malaysian government, in the past, on the application of certain employers, allowed them to make wage deductions and/or wage advances, contrary to the general provisions in law with the intention to allow employers to recover from migrant workers monies expended by employers to get migrant workers to Malaysia to work for them. This included sometimes not just a means to recover levy paid, but also all other costs incurred by employers to recruit and bring in migrant workers. Approvals were given by the government with no consultation or agreement of the worker or their unions. As of 1/4/2009, the Malaysian government stopped this practice, and made it clear that it is employers that have to pay the levy and they cannot recover the said sum from migrant workers.

Labour Director-General Datuk Ismail Abdul Rahim was reported saying that, “…The rationale behind getting employers to bear the levy was to discourage them from employing foreigners…” [Star, 16/4/2009, Employers can deduct levy from wages, again]. As such, this current move to make migrant workers pay the levy removes the very intention of levy, i.e. to discourage employers from employing foreign workers. 

The reason for the new decision ‘… is to alleviate the hiring cost for employers, said Finance Minister II Datuk Seri Ahmad Husni Hanadzlah...’ [Star, 30/1/2013, Cabinet: Foreign workers to pay levy instead of employers with immediate effect]. If the Malaysian government now wants to reduce the financial burden of employers who hire migrant workers, then rightfully the government should reduce or remove the levy – not shift the burden to workers. 

Migrant workers sacrifice a lot when they elect to come to Malaysia to work. They have to leave behind the spouses, children, family and friends for Malaysian law allows them to only come alone and work in Malaysia, and they also are barred from falling in love and getting married during their employment period  which is usually for at least 5 years. They also end up incurring substantial debt when they come, for they have to pay, amongst others recruitment agents, most times these payments include both legal and ‘illegal’ payments. Whilst in Malaysia, they are bound to just one employer – having no right to change employers. 

When they claim rights, even through existing legal avenues, they generally are terminated and their employment pass/permits are also cancelled depriving them the right to stay (or work) legally in Malaysia until their claims are resolved. The termination of these passes/permits is done by the Malaysian government irrespective of whether there are outstanding claims or pending cases concerning the said worker’s rights. 

This precarious reality of migrant workers makes them vulnerable to exploitation by some employers, knowing that it is most easy to violate worker rights and then get off scot free. Until laws and policies are amended to protect migrant’s worker rights, naturally migrant workers become the preferred choice over local workers as they are certainly a more easily exploited class of workers.

We call on the Malaysian government to immediately rescind the decision made by the Malaysian cabinet on Wednesday(30/1/2013) to allow employers of migrant workers to recover the levy they pay the government by deduction of wages of migrant workers.

We take the position that all workers, including migrant workers, are entitled to receive minimum wages, whereby this is the basic wage and should not include allowances, benefits and other work incentives. Employers should not be permitted to remove pre-April 2012 worker entitlements and benefits, being the date the Minimum Wage Order 2012 came into force, from existing and subsequent employment contracts.

We call on the Malaysian government to end all forms of discrimination against workers, with regard to, amongst others, their nationality, gender, duration of their employment contracts.

Charles Hector

Pranom Somwong

Syed Shahir Syed Mohamud

For and on behalf the 77  groups listed:

ALIRAN

Angkatan Rakyat Muda Parti Rakyat Malaysia (ARM-PRM)

Asian Migrant Centre (AMC), Hong Kong 

Asian Migrants Coordinating Body (AMCB) Hong Kong

Asia Monitor Resource Centre, Hong Kong

Asia Pacific Forum on Women, Law And Development (APWLD)

Asia Pacific Mission For Migrants (APMM ), Hong Kong

Association of Indonesian Migrant Worker in Hong Kong (ATKI-HK)

Bangladeshi Ovibashi Mohila Sramik Association (BOMSA)

Burma Campaign Malaysia

BWI (Building and Wood Worker's International)

CAW (Committee for Asian Women)

Centre for Human Rights and Development-Sri Lanka

Center for Orang  Asli Concerns (COAC), Malaysia

CEREAL - Centro de Reflexión y Acción Laboral – Guadalajara, Mexico

Clean Clothes Campaign( CCC )

Community Action Network (CAN), Malaysia

Community Development Services, Sri Lanka

COVA (Confederation of Voluntary Associations), India

Electronic Industry Employees Union Western Region (EIEUWR), Malaysia

Far East Overseas Nepalese Association (FEONA), Hong Kong

Filipino Migrant Workers Union (FMWU)

GoodElectronics Network

Human Rights Ambassador for Salem-News.com

IMA Research Foundation, Bangladesh

International Domestic Workers Network

Kesatuan Pekerja-Pekerja Polyplastics Asia Pacific Sdn Bhd.

Kesatuan Pekerja-Pekerja MHS Aviation Berhad

Kesatuan Sekerja Industri Elektronik Wilayah Selatan (EIEUSR), Malaysia

LSCW (Legal Support for Children and Women), Cambodia

MADPET (Malaysians Against Death Penalty and Torture)

Malaysia Youth & Students Democratic Movement (DEMA)

MAP Foundation, Thailand

Migrant Domestic Workers Trust, India

Migrant Forum, India

Migrant Health Association in Korea

MIGRANTE International

Mindanao Migrants Center for Empowering Actions, Inc. (MMCEAI)

Mission For Migrant Workers - Hong Kong

MTUC (Malaysian Trade Union Congress)

Myanmar Ethnic Rohingyas Human Rights Organization Malaysia (MERHROM)

National Domestic Workers Movement, India

National Union of Transport Equipment & Allied Industries Workers (NUTEAIW)

Network of Action for Migrants in Malaysia (NAMM)

NLD-LA (National League for Democracy-Liberated Areas), Malaysia

NUBE (National Union of Banking Employees), Malaysia

OKUP (Ovibashi Karmi Unnayan Program) in Bangladesh

Parti Rakyat Malaysia(PRM)

Paper & Paper Products Manufacturing Employees' Union Of Malaysia (PPPMEU)

 Persatuan  Sahabat  Wanita, Selangor

Persatuan  Kesedaran Komuniti Selangor (EMPOWER)

Persatuan Masyarakat Selangor & Wilayah Persekutuan (PERMAS)

PILAR (United Indonesians in Hong Kong against Overcharging) , Hong Kong

Pusat KOMAS (KOMAS)

Saya Anak Bangsa Malaysia {SABM}

SUARAM, Malaysia

Tamilnadu Domestic Workers Union, India

Tamilnadu Domestic Workers Welfare Trust, India

Tenaganita, Malaysia

Transient Workers Count Too (TWC2), Singapore

United for Foreign Domestic Workers' Rights (UFDWR )

WAC, Philippines

WARBE Development Foundation-Bangladesh

Women Workers Lead

WH4C – Workers Hub For Change

Yayasan LINTAS NUSA - Batam – Indonesia

Solidaritas Perempuan (SP) / Women's Solidarity for Human Rights, Indonesia

SEWA (Self Employed Women’s Association), India

Electronic Industry Employees Union Eastern  Region(EIEUER), Malaysia[KSIEWTSM]  

MakeITFair

Nepal Labour Journalists' Association

Migrant  Care, Indonesia

CIMS (Centre for Indian Migrant's Studies)

United Filipinos in Hong Kong (UNIFIL-MIGRANTE-HK)

Kav LaOved – Protecting Workers' Rights

PINAY: Filipino Women's Organization in Quebec

Tenaga National Berhad Junior Officers Union (TNBJOU)

Employers of Domestic Workers, and small business workers should pay a lower levy...

Should levy paid by employers who want to hire foreign workers be increased? Yes, it should - but more importantly, there must be a minimum wage set for the various jobs in plantations, factories and construction sites generally - and the wages must be a suitable living wage for a Malaysian worker. Then Malaysian workers may be interested in taking up these jobs. If the employer still wants to employ migrant workers, then naturally he must pay this levy. [Levy was to discourage employers in Malaysia from employing foreign labour rather than local workers]

However, when it comes to domestic workers - I believe that the levy must be reduced.

When it comes to coffee shops, restaurants and smaller businesses employing foreign workers especially in the smaller towns, the levy must be reduced.

And, if there is levy, then maybe migrant workers should also have equal access to the facilities provided in Malaysia including healthcare.  It is odd that foreign persons are charged much higher to access government healthcare facilities. It is better for the sick to seek and get medical treatment soonest - not only, is it humane but it is also for general good of the community. Sickness spread -- and it indiscriminately spread to all persons, irrespective whether the person is a citizen or a non-citizen. Hence, healthcare must be available to all free....or at a very nominal rate. Now a foreigner pays RM50 for registration to see a doctor, whilst the Malaysian pays RM1 - and the foreigner has to pay for every other thing as well, and no treatment/surgery, etc until money is paid. [If the domestic worker, as an example is paid RM500 - this is 10% of the monthly wage...just to see the doctor, and this is certainly wrong.]

PETALING JAYA: Various organisations are against the Government's move to increase the levy on foreign workers, arguing that the extra costs will only be passed on to consumers.

Real Estate and Housing Developers Association president Datuk Ng Seing Liong said it was not the right time to increase the levy as developers were in the midst of adopting the Industrial Building System (IBS).

“It's definitely going to be a huge increase in costs for property buyers. It is counter-productive. We are implementing the IBS to eventually reduce dependence on foreign labour, which shows that we are working with the Government,” he said.

The IBS is a system in which construction materials and parts are pre-fabricated in factories and not on-site by labourers, which was the usual practice.

Deputy Prime Minister Tan Sri Muhyiddin Yassin, who chairs the Cabinet Committee on Foreign and Illegal Workers, had announced on Thursday that the levy for foreign workers would be increased next year.

Amnesty would also be granted to illegal foreign workers to return to their own countries without facing action.

Malaysian Foreign Maids Agencies Association president Alwi Bavutty said the levy for the industry should not be raised from the present RM360 yearly.

“Employers now have to pay RM550 or more for monthly salaries and this will add to their burden,” he said, adding that many Malaysians had no choice but to hire maids.

Malaysian Indian Contractors Association president R. Muthiah said the move would increase the cost of bringing in foreign workers through Construction Labour Exchange Centre Bhd, a government-appointed agency.

However, he said the association accepted that any levy increase would need to be tolerated by the industry.

In Johor Baru, Malaysian Indian Business Association president K. Sivakumar said the Government should not make such decisions without a contingency plan.

“If such decisions are rushed, the country's economy will be affected because many industries depend on foreign workers,” he said, describing any such move as “untimely”.

“Most locals are not up to doing hard labour or do not possess the skills to perform the jobs that foreign workers do,” he said, adding that there should be more night schools to train local workers in various skills.- Star, 22/5/2010, Concern over higher levy on foreign workers